Christian Dior: Paying Just 16 Times Forward Earnings For LVMH

2025-03-03 10:30:00 ET

Summary

• Christian Dior's primary asset is a 42% stake in LVMH, trading at a 20% discount to LVMH's value, making Dior more appealing.
• Dior's consolidated financials show strong performance, with a 4.4% free cash flow yield and a dividend of 13 EUR per share.
• Dior's stake in LVMH offers a cheaper entry point, valuing LVMH at 16 times earnings by 2027, compared to 20 times directly.
• I recommend buying Christian Dior over LVMH to gain exposure to LVMH at a significant discount, enhancing potential returns.

Introduction

Christian Dior ( CHDRF ) ( CHDRY ) is best known as one of France's most prominent fashion brands and enjoys worldwide brand recognition. However, Christian Dior as a company is, in fact, the mono-holding with a 209.03M share stake in LVMH ( LVMHF ) ( LVMUY ) as its main asset. The holding discount has now increased to 20% (from 15% about two years ago ), making Dior far more appealing than LVMH (which still is relatively attractive). ...

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